| A good tax shelter is hard to come by, but the | | | | Most of the money paid for mortgage payment goes |
| perfect shelter may be right in front of your eyes. | | | | toward interest, especially when the loan is brand |
| There are many companies which are encouraging | | | | new. All the interest paid on a home loan is tax |
| people to spend their hard earned money on | | | | deductible. Not only that but you can own up to two |
| investments in tropical places where it will be kept | | | | homes and the interest payments on both are tax |
| safe and away from the IRS. Yes, this type of tax | | | | deductible. This type of deduction reduces our |
| shelter is illegal and really aren't very efficient in | | | | taxable income and therefore reduces the amount of |
| keeping your money away from the tax man. | | | | taxes we have to pay each year. Additionally any |
| However, most people do not realize that that the | | | | money put out for home improvements or home |
| government allows us to use our homes as a way of | | | | improvement loans can also be tax deductible. These |
| collecting a tax deductions, credits, and benefits. | | | | are calculated differently then mortgage taxes. Only |
| These benefits were established to offset the costs | | | | capital investments can be used as tax deductions. |
| of owning a house. It is said that home owners are | | | | Capital investments are those which increase the |
| the basis to all communities and therefore the | | | | value of the home. For example adding new room or |
| economy as a whole. | | | | another bathroom, anything that prolongs roof life, or |
| It is the homeowner who purchases services and | | | | even adapting the home for the elderly or people |
| goods which in turn supply jobs to the people of | | | | with disabilities. |
| community which eventually leads to funding state | | | | Married couples are allows to have up to $500,000 |
| and local taxes. The deductions help keep the real | | | | profit from the sale of home which was the primary |
| estate market full of new buyers which helps the | | | | residence for over 5 years. This profit is tax free. |
| prices of houses increase over time. As the public | | | | Single people are allowed $250,000 profit which is also |
| needs more and more houses and the supply of | | | | tax free. Houses are great shelters and this is one of |
| available homes gets smaller, it causes the market | | | | the reasons that home based businesses are so |
| price of houses to increase. This creates equity and | | | | popular and successful. When individuals use even |
| real wealth in the house and therefore a sound | | | | part of their home for business purposes they are |
| investment which can be passed down from | | | | able to write off a percentage of those costs |
| generation to generation. Owning your own home is | | | | associated with whatever part of your house you |
| not just the American dream it can work great as a | | | | are using for a business. This may include utility bills, |
| way to store and built personal wealth. | | | | insurance, repair cost, and depreciation. |